Ok, I did some brain storming and I see 2 possible outcomes ahead. One has us going up to DIA 118.16 and topping out around September 9th-20th as that’s when the Legatus Meeting is happening for this fall. The last meeting was February 4th-6th, 2010… and that’s when we bottomed out. They injected stimulus package part two, and up the market went until the April high.
So, do we go up first… maybe? But that would setup the market for a huge crash down, from a much higher level. While it’s possible to go up into the Legatus Pilgrimage this fall, I tend to think we are going down into that time frame, and will hit the 8300 print during that event.
Once we hit it, we should go back up for a wave 4 for a little while, and then back down again into the December 7th time frame. This would put the SPX at 725 or so, and should complete wave 5 down of a larger wave 1 move. We should go up into next year, but at some point within the next few years, we are going to reach our final bottom of 20.16 SPY. (How’s that for scary?)
So, when will DIA 118.16 be hit, and will it? Once inflation comes into play, we could see Dow 38,000 like Mahendra predicts. Who knows that far down the line? But for now, let’s focus on tomorrow and the next few weeks first.
Tomorrow is a huge day in the market, and should it be bad jobs data then I could easily see the 107 area FP hit all in one day. I’m 70-80% bearish right now, but only based on my gut feelings (which are wrong a lot… LOL), not because the charts, which still look bullish. Plus the fall pilgrimage could be a high this time… not a low. And don’t forget that the DIA 118.16 will eventually play out. Will we do it now, while we are close to it? Or, is it for next year some time?
I’m leaning toward the downside first, with the 107 FP being tomorrow’s target. This is just speculation here folks… the charts are still bullish. If we go down, then I’d expect a bounce at that level. At that point I’d have too look at the charts again to see if we are going to continue down, or turn back up and go for 118.16 dia.
If we go up tomorrow, then we could be going to the 118.16 print into the September 9th-20th time frame. The charts can roll over at any time right now. They are still bullish, but at extreme levels right now. This is a very tricky place to be in, as that weekly chart tells me that we are going up to 118.16 FP first… which would set up a once in a lifetime shorting opportunity during the fall pilgrimage.
But other things tell me we are going to sell off first. I have no idea which one is right, but I cover both in the video… and focus on the bearish case the most. Just don’t rule out the bullish case here, as the charts are not supporting my bearish case right now.
So be prepared to go long up to dia 118.16 into September the 9th-20th… should the charts push up higher. I’m bearish by nature, and it clouds my judgment sometimes… so don’t take again as “written in stone”…
Sorry folks, but today end with a lot of mixed signals. The 60 minute chart is finally rolling over as the histogram bars are now at the zero mark and ready to cross down. But, the overall price level simply traded sideways to slightly down. That’s call a “Bull Flag” pattern, and could easily play out tomorrow morning.
However, when a pattern fails, it commonly makes a big move in the opposite direction… meaning down! We still have the FP prints of 107.12 spy and 107.35 from last week, but we don’t know when they are going to play out? If we start back down tomorrow, then we could easily hit that target by this Friday.
But, that daily chart is still rising right now, and the weekly is also pushing up higher too. While the daily is overbought, it’s still not showing any signs of turning back down yet. Some people have August 6th as a turn date, so we could chop around here until then.
I could easily see a move down into tomorrow morning, and then a rally back into the afternoon. With that 60 minute chart just now getting ready to go negative, I think it will only put in a small tower below zero and rise back up into tomorrow’s close. This would allow it to put in a smaller histogram tower above zero, forming a negative divergence on the chart.
That would set up Thursday as a possible big down day as the 60 rolls back down in the morning on the bad jobs data. By that time, the daily could also be rolling over a little too. But understand this, it is common to see a higher price level with a second lower high on the histogram tower of any chart. Meaning… while we could sell off early tomorrow morning, the afternoon rally could push us up toward that 1131 level (or more), as it squeezes all the shorts that just piled on.
Be cautious about going short right now, as no selling is likely to stick until the daily chart rolls over. That might not happen until this Friday… or even next week? With the weekly pushing up the daily, it’s hard to see any selling stick yet. We need the daily to start turning down first, and then I think the weekly will follow it.
So for tomorrow, if will sell off in the morning, look for the 60 minute chart to start to turn back up and then bail on your shorts. Usually all the action happens within the first 1-2 hours of the day, so that’s when I’d expect the selling pressure to lighten up a little.
A move down to fill the gap at 1105 spx would be my likely guess for a downside target. That would also hit the rising trendline that supporting this whole move up from the 1010 lower. If that line breaks, then the market should fall hard. But on the first hit of that trendline, I’d expect a bounce from it.
This all assumes the government doesn’t release some bogus news or data tomorrow morning to cause a gap up to fulfill the bull flag. From a technical point of view, it’s not really a good bull flag on the 60 or 15 minute charts. And on the daily chart, it needs another 2-3 days of sideways trading to be called a bull flag. So while it looks like a bull flag, I don’t think it actually meets all the proper qualifications.
Anyway, that’s about the best guessing I can do for you…
Red
P.S. Since the government has super computers telling them all the technicals in the market, releasing good job’s data (bogus numbers of course) would allow the technicals to play out to the upside. Basically, with the daily still pointing up, and the weekly too, whatever news they release will determine “When” they both roll back over. Good news means they will likely extend into overbought territory more. Bad news means they roll over at any point now.
While the jury is still in determining the market direction from here, I’m leaning bearish at this point. However, I do see Monday as an UP day, but after that I think the overall week will be down. For the upside, I don’t have anymore short term prints except the 111.28 spy print that I posted Friday.
Since that was an intraday print, it should be hit within 1-2 days… meaning Monday, (since it failed to hit there on Friday). That would also be right at the falling channel’s upper trendline (shown on the 60 minute chart). I don’t have any other upside prints except the longer term print of DIA 118.16 (about 11,800 Dow), which is a long ways away right now.
But on the downside, I have a short term print of 107.12 spy from a week ago, and Anna caught it again on the intraday chart on Thursday, further confirming the accuracy of the print. The level she seen was 107.35 spy, so I’m pretty sure we will see that level next week some time.
On a longer term, I have the Dow 8300 print from several weeks back. So when will that play out? If that weekly chart rolls over next week (which could happen if we close down around the 107 level next week), then we could hit that low within a few weeks.
I don’t for sure yet, as until the weekly chart rolls over (the daily too of course, and I expect that to happen early next week on it), it’s still possible for the market to go up more. But, I’m 70-80% bearish for next week, and I do expect that 107 FP area to be hit before next Friday.
At that point, I’d need to look at the charts again to see what the weekly chart does. Again, if it rolls over, the market is toast! That 8300 Dow will be upon us before the end of August. And, there’s enough important data coming out next week that could easily cause the sell off to happen.
On Tuesday we have Personal Income and Personal Spending, which will move the market one way or the other. On Thursday we have Continuing Claims and Initial Claims out, and finally Friday has the Unemployment Rate, Hourly Earnings, and Consumer Credit… all are “market movers”!
There are plenty of reasons to blame the sell off on next week, as I really can’t see all of those reports being positive and causing another move up in the market. This leads me more and more bearish, as I just don’t think the weekly chart has enough juice left for a breakout move to the upside. Especially now that the daily has ran out of steam too.
So from a technical point of view, the weekly and daily charts are running on empty for power now. I’d say they’ve used up 90% of their juice, and could roll over at any time now. The monthly is still bearish, and only took a “pause” period last month, which still didn’t do any damage to the overall trend down.
And of course from a “news point of view”, next week could scare a lot of bulls from staying long. We all know that the market is manipulated and 100% controlled (you should know that, if you are a regular reader), which means they could make all the reports look positive, by getting out their erasers and changing the data.
But, they also follow technical patterns too… especially on the larger time frame charts, as they are just too hard to manipulate. The intraday moves don’t take as much money to control, as turning around the Titanic would (meaning the monthly charts’ down trend)!
Ok, so Monday I’m looking to go up to that 111.28 print by the close. Then I’m looking for the 60 minute chart too have peaked out, and the daily to get even closed to have a bearish cross on the MACD lines. Since Tuesday starts out the week with the first of many reports that can move the market, I’d expect that to be the start of move down toward our 107 area FP.
The market moves fast on the way down, so who knows how fast it could hit that target low? Bad news on Tuesday could cause us to hit that level before the Thursday news, because traders will be selling in fear that the job’s data will be horrible. The old “buy the rumor, sell the fact”, or in this case… “sell the rumor, MAYBE? buy the fact”.
But the selling isn’t done completely. While I think we will close positive tomorrow, after a morning sell off, next week should start out down. The charts tell me that these last 3 down days were likely the start of a wave 1 move, with the close of tomorrow being the start of a wave 2 back up.
However, I do think we could sell off in the morning first, and then rally the rest of the day… closing positive at the end. The downside target tomorrow isn’t known, but certainly the 1085-1090 area is the first area I’d expect hit. If that breaks, then a move down to our 107.12 (Anna got 107.35) spy FP would be the next area of support.
If we do go down that far tomorrow morning, then you definitely should expect a move back up throughout the rest of the day to occur. We have a 69% chance of closing green according to Cobra’s after the bell report. That makes a lot of sense too me, as the 60 minute chart needs to work off the oversold conditions it now has.
So, where ever we open at tomorrow morning, any selling should be short lived as the 5 and 15 minute charts bottom out and move back up throughout the rest of the day. Looking at the afterhours prints for clues, I see a 111.28 spy print showing up as a “high” now, but we haven’t been there. Is that another FP, telling us the closing level tomorrow? Could be?
That would certainly be a positive close, if we went back up there into the afternoon session tomorrow. If that’s the case, then I can’t see the 107 area being hit tomorrow morning, but instead the first support area of 1085-1090 spx. So, for you bears, look for the selling to stop after the first 1-2 hours in the day.
And, since tomorrow is Friday, it could stop within the first hour as the traders leave early for the weekend. While it would be great to see the 107 area hit tomorrow morning, I’m giving it low odds right now. Let’s see how fast it moves to the double bottom area first (from today’s low), then we can see if it going to break that support or bounce and move back higher the rest of the day.
A quick move down (with volume) would indicate it is likely to break support, but if it takes its’ sweet time, and doesn’t hit that area until the 10:30-11:00 am time frame, then it will likely hold, and a move back up would be expected. Hope this makes sense to you guys…
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